user
Write a response that appropriately completes the request.

### Instruction:
Explain the concept of fractional reserve banking in a few sentences.

### Response:
assistant
Fractional reserve banking is a system whereby banks maintain a reserve of only a fraction of the total deposits made by customers. This means that the bank is able to form loans from the deposited funds and expand the money available in the economy, while still maintaining customer deposits. This system of banking was first developed in Europe in the 17th century and is now a commonly used system worldwide.